When a publication we like and (mostly) trust like Business Insider calls a piece of breaking news an example of “the tech market's most dominant trend,” we figure we should pay attention.
That’s what happened today with the alert that Analog Devices has acquired chipmaker Linear Technologies for a cash-and-stock deal totalling close to $15 million.
As Business Insider notes, “There has been a frenzy of multibillion-dollar deals in the tech industry over the past 18 months, including Intel's takeover of Altera, Avago's acquisition of Broadcom, and Dell's $67 billion takeover of EMC.”
That part of their assertion sounds on the money. But then the story goes on to note that the acquisition is due to paradigm shifts in the way we capture and store data for cellphone, e-commerce, or any other computer data. Business Insider states that the deal is mostly about the shift away from hard-drives and towards “less bulky flash-memory chips ....[and] the cloud.”
Except, when you read the story’s comments from unhappy readers, you find out that the publication is completely wrong. Neither Analog Devices nor Linear Tech are in the computer memory or cloud computing business. They’re both manufacturers of analog Integrated Circuits -- parts dedicated to things like sensor interfacing, power management, serial communications and other functions more applicable to the ever-percolating “Internet of Things” (IoT).
If you bounce over to The Wall Street Journal’'s version of the story, you find this is exactly right. As the WSJ notes: “Analog and Linear Technology specialize in chips based on analog technologies...typically used to handle real-world signals such as sound, light heat or pressure….One of the biggest applications for analog chips is in smartphones, where they are used for purposes such as helping to manage radio signals.”
Other reports basically echo this information. Nothing to do with memory. So what’s the takeaway trend here? Not that there is a battle being waged in the digital storage space so much as there is a rush of consolidation, acquisitions and mergers in the tech space occurring across a variety of disciplines and businesses.
WSJ says suppliers are combining to find growth as sales in their longtime markets slow. Companies also say they can save money by pushing a larger number of products through a limited number of salespeople.
Or, as the first comment on the WSJ story says: “Soon there will be one analog, one rf, one digital, one processor and one memory company. No growth always means consolidation. $150M in annual savings means layoffs.”